Canada’s Big Six banks to test tokenised Canadian-dollar deposits for interbank payments

# What happened

Canada's six largest banks announced a joint project to explore a tokenised deposit system denominated in Canadian dollars. The group comprises Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Scotiabank and TD Bank Group. The first phase will test transfers of tokenised deposits among the participating institutions.

# What the project will do first

The banks intend to create a common process for moving digital representations of Canadian-dollar bank balances between regulated institutions. The initial tests are interbank transfers only — practical experiments to validate technical flows and operational processes for tokenised deposits held on a shared platform or ledger.

# How these tokens are treated

# Why start with interbank transfers

Beginning with transfers between banks narrows scope: it focuses on settlement, reconciliation and messaging standards among regulated institutions rather than retail distribution, custody of third-party tokens, or underwriting of reserve assets. This approach lets banks test the mechanics and interoperability before expanding use cases.

# Possible next steps mentioned by participants

Participants expect the initiative could eventually connect to other bank-led digital-asset networks. The immediate work is limited to testing transfer processes among the six banks, but they left open the possibility of adding other banks to the project as it develops.

# Practical implications for payments and treasury teams

• Faster interbank settlement: Tokenised deposit transfers aim to simplify movement of bank balances by representing them as tradable digital tokens between institutions.
• Operational redesign: Banks will need shared standards for token formats, messaging, reconciliation and legal arrangements to recognise tokenised transfers as transfers of deposit liability.

# What this is not

• It is not a rollout of a retail stablecoin issued outside the banking system. The banks describe the tokens as bank liabilities, not separately issued reserve-backed stablecoins.

# Bottom line

The six largest Canadian banks have begun collaborative testing of tokenised Canadian-dollar deposits to streamline interbank transfers. The effort keeps tokens as bank liabilities, starts with transfers among regulated institutions, and contemplates future connections with other bank-led networks. Expect the work to concentrate on technical interoperability, legal and operational frameworks, and limited domestic testing before any wider rollout.